Trade-Ideas LLC identified

Seadrill

(

SDRL

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Seadrill as such a stock due to the following factors:

  • SDRL has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $83.4 million.
  • SDRL has traded 291,202 shares today.
  • SDRL is up 4.8% today.
  • SDRL was down 9.1% yesterday.

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More details on SDRL:

Seadrill Limited, an offshore drilling contractor, provides offshore drilling services to the oil and gas industry worldwide. The company operates through Floaters and Jack-up Rigs segments. SDRL has a PE ratio of 1. Currently there are 2 analysts that rate Seadrill a buy, 1 analyst rates it a sell, and 4 rate it a hold.

The average volume for Seadrill has been 13.3 million shares per day over the past 30 days. Seadrill has a market cap of $3.1 billion and is part of the basic materials sector and energy industry. The stock has a beta of 1.36 and a short float of 15.8% with 4.12 days to cover. Shares are down 48.2% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Seadrill as a

hold

. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

Highlights from the ratings report include:

  • The gross profit margin for SEADRILL LTD is rather high; currently it is at 61.55%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 33.04% significantly outperformed against the industry average.
  • Despite the weak revenue results, SDRL has outperformed against the industry average of 22.5%. Since the same quarter one year prior, revenues slightly dropped by 6.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Energy Equipment & Services industry. The net income has significantly decreased by 37.4% when compared to the same quarter one year ago, falling from $605.00 million to $379.00 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, SEADRILL LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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